The facilities provided do not come with any costs and any active mutual fund distributor can use them for business. Moreover, the facility is not restricted only for distributors of Reliance Nippon products. Any distributor with a valid Amfi registration number (ARN) can use the space, irrespective of the fund house he or she is empanelled with.
This initiative could not come have come at a better time when several new distributors have joined the industry and are in the process of establishing their business. For the majority, it may not be possible to set up their own offices to conduct client meetings given the costs involved. Further, such an initiative is likely to inculcate professionalism among distributors.
Sundeep Sikka, chief executive officer (CEO) of Reliance Nippon Life MF, says, "Mutual fund distributors are the backbone of our industry. Without them, penetration of mutual fund products can not be enhanced. The last few weeks of operating our first Prosperity Hub have provided positive feedback and we have plans to replicate this in other cities and towns soon. But our main focus will remain on smaller cities and towns as distributors in those regions need a lot of infrastructure support."
Reliance Nippon Life MF plans to open 10 more such offices by June next year. Initially, half of them will be in big cities like Delhi, Bengaluru, Chennai and Kolkata. The other half will be in relatively smaller cities like Nagpur, Lucknow and Ahmedabad, among others.
“Depending on our experience we will not hesitate to go deeper with this concept. Our idea is to help distributors grow the overall industry. If the sector grows it is needless to say that we will also grow,” adds Sikka.
However, such initiatives do come with a cost. Though the fund house did not disclose the cost involved, it said it would not be taken out of the fund meant for investors' awareness programmes. “The costs for this initiative will be part of our balance sheet,” Sikka clarified.
Other big fund houses Business Standard spoke to appreciated the move. However, as of now they have no plans to follow the initiative. Mos fund houses said they were focusing more on technological upgrades to assist distributors in on-boarding investors faster.
India has 100,000 mutual fund distributors. Industry sources say informed individuals are joining the industry as distributors, which will help the sector reach new heights.